Publications
Analysis Series
Analysis/0064/August/2026/London-Dialogue. 12 August 2026
Author: Dr Tauseef Javed
Introduction
Artificial intelligence (AI) is quickly emerging as a key area in geopolitical rivalry. The worldwide competition over advanced computing, semiconductors, data, cloud infrastructure, and AI models is becoming more connected to national security and foreign policy. However, much of the discussion focuses on the rivalry between the United States (US) and China. Less consideration has been given to how middle powers are reacting to this technological race and using it to enhance their strategic independence.
The United Arab Emirates (UAE) serves as a significant example. In the past decade, Abu Dhabi shifted from viewing artificial intelligence mainly as a tool for economic modernisation to considering it a form of national power. The UAE’s AI goals are part of a wider plan that includes technological progress, investments, infrastructure, and global collaborations. Its 2017 AI Strategy aimed to position the country as a leader in AI adoption and investment. Additionally, Abu Dhabi has established specific institutions to attract capital, skilled talent, and international partnerships in high-tech sectors.
The UAE’s AI strategy has importance beyond just technology policy; it acts as a tool of diplomacy. This article suggests that the UAE is creating a form of AI diplomacy in which technology collaborations are leveraged to boost economic diversification, attract strategic investments, strengthen ties with global powers, and maintain flexibility in a competitive international arena. Instead of siding exclusively with Washington or Beijing, Abu Dhabi aims to operate within various technological ecosystems and progressively build the skills needed to emerge as a significant AI hub. Therefore, it can be said that AI is shaping the UAE’s statecraft.
The UAE’s experience shows that the geopolitics of AI would not be dominated solely by the US and China. Middle powers—possessing capital, energy, infrastructure, geographic benefits, and political influence—can also influence the rising technological landscape.
AI as an Instrument of Statecraft
The growth of AI is transforming how technology intersects with international politics. Traditionally, technological progress was viewed mainly as a driver of economic growth, separate from foreign policy. However, this separation is becoming less tenable. Advanced AI depends on critical resources such as semiconductors, data centres, electricity, cloud infrastructure, research institutions, skilled labour, and global investment. Possessing control over these resources confers strategic benefits. As a result, governments are increasingly considering technology as a key component of national security and economic diplomacy.
The US-China rivalry vividly exemplifies this shift. Washington has implemented export controls and technology restrictions to block China’s access to advanced semiconductors, while Beijing seeks greater technological independence. AI is now embedded in a wider struggle over technological ecosystems and strategic influence. For middle powers, this competition offers both obstacles and prospects. Although they might lack the technological might of the US or China, they can leverage other strategic assets such as capital, energy resources, infrastructure, markets, geographic advantages, and diplomatic ties.
The UAE has many of these assets at once. Its sovereign wealth funds offer significant investment power, while its energy resources supply the electricity needed for data-heavy technologies. Its ports and logistics networks ensure global connectivity, and its strategic location sits at the crossroads of Europe, Asia, and Africa. AI therefore fits naturally into the UAE’s broader model of geoeconomic statecraft.
From Economic Diversification to Technological Power
The UAE’s AI ambitions are closely linked to its post-oil economic plan. While economic diversification has traditionally focused on sectors like tourism, finance, and logistics, it now emphasises building expertise in advanced technologies to create new sources of national strength. Launched in 2017, the UAE’s AI Strategy aims to embed AI across government and key industries, fostering a technology-driven economy. The government has also set up institutional frameworks to encourage AI investment, research, and partnerships. For instance, Abu Dhabi’s Artificial Intelligence and Advanced Technology Council is responsible for developing investment, research, and infrastructure projects, positioning the emirate as a centre for AI collaboration and talent.
This marks a significant shift in the country’s development approach. The goal is no longer just to buy foreign technology but to become a hub where advanced technologies are created, funded, implemented, and exported. This difference is key to understanding the UAE’s AI diplomacy. A country that only purchases AI tech remains reliant on external providers. In contrast, a country that attracts AI firms, builds infrastructure, nurtures talent, funds research, and forms global tech partnerships holds more influence over the channels through which technology spreads. The UAE aims to adopt this latter model.
G42 and the Internationalisation of UAE AI
G42’s emergence as Abu Dhabi’s leading AI company highlights this change. In 2024, its partnership with Microsoft reflected the UAE’s stronger connection to the U.S. AI sector. Microsoft invested US$1.5 billion in G42 and gained a board seat with Vice Chair Brad Smith. Both companies also agreed to support a US1 billion fund aimed at enhancing AI skills throughout the UAE and beyond.
This partnership’s importance goes beyond financial benefits. It showed that AI infrastructure can serve as a means for international cooperation without forming traditional political alliances. The deal included an intergovernmental assurance framework involving the US and UAE, covering security, responsible AI, and technology governance. Essentially, commercial tech collaborations are integrated into a broader diplomatic and security relationship.
This is exactly what sets the UAE’s approach apart from a traditional economic diversification strategy. The country leverages technology firms and investment tools to link its domestic economic goals to its international strategic partnerships.
Washington and Abu Dhabi: AI as a New Strategic Partnership
The US-UAE relationship illustrates how AI is becoming a key element of bilateral ties. Washington aims to keep advanced AI technologies within secure ecosystems, while the UAE seeks access to American semiconductor tech, cloud infrastructure, and cutting-edge AI research to meet its goals. These interests are increasingly aligned. In May 2025, the US and UAE launched an AI Acceleration Partnership to boost cooperation on critical technologies. This included plans for a 1-gigawatt AI data centre as part of a 5-gigawatt UAE-US AI technology cluster in Abu Dhabi.
The AI campus in the UAE highlights that AI geopolitics involves more than just algorithms; it also encompasses physical infrastructure. Data centres demand vast amounts of electricity, land, capital, and connectivity. The UAE can supply many of these resources, while U.S. companies provide advanced chips, cloud services, software, and technical expertise. This fosters a strategic interdependence: the UAE relies on the U.S., and American firms benefit from UAE capital, infrastructure, and access to a key regional market. The Abu Dhabi AI campus, for instance, is designed to serve a large population across the Middle East, Africa, and South Asia. As a result, the UAE is evolving from just a user of American AI to a key hub in the global AI infrastructure, which is primarily being built by American companies.
China in the Equation
The UAE’s AI diplomacy is closely linked to China. For many years, Abu Dhabi has cultivated strong economic and technological ties with Beijing. Chinese firms have contributed to telecommunications and digital infrastructure throughout the Gulf, and China continues to be one of the UAE’s key economic partners. This situation poses a dilemma for Washington. As advanced AI technologies are becoming more regarded as strategic assets, US policymakers worry that sensitive technologies sent to Gulf allies might eventually end up with China. In 2025, reports emphasised these concerns, especially regarding the UAE’s past ties with Chinese tech companies and the security of its advanced computing infrastructure.
For the UAE, severing ties with China would weaken the core principle guiding its foreign policy: diversification. Abu Dhabi has always aimed to prevent over-reliance on any one external partner. This same rationale that led it to diversify energy sources, investment avenues, and diplomatic links now also influences its approach to technology. This does not imply that the UAE can indefinitely access every technological ecosystem without restrictions. AI is unique because advanced chips and computing infrastructure are becoming more regulated for national security reasons. The UAE’s experience illustrates the boundaries of strategic independence. While the country aims to maintain ties with both Washington and Beijing, the AI competition landscape is increasingly pushing for specific choices in certain areas.
AI Diplomacy as Strategic Hedging
The UAE’s strategy can be seen as a type of strategic hedging. Hedging is not about staying neutral or keeping equal ties with all rivals. Rather, it means fostering enough connections across various networks to lower risks and expand strategic possibilities. This aligns with the overall approach of UAE foreign policy. Abu Dhabi has formed partnerships with the US and grown economic relationships with China. It has also strengthened ties with India while keeping close connections with Europe. Additionally, it has invested in infrastructure and technology in various regions. Now, AI is emerging as another area where this strategy is being implemented.
The UAE aims not just to choose between American or Chinese AI futures but to grow its influence in the global AI landscape so that major powers find it worthwhile to cooperate. This approach, known as AI diplomacy, involves the UAE seeking access to American technology, Chinese markets, international investments, and global talent, all while building its own capabilities. Its final aim isn’t full technological independence—considered unlikely—but to increase its technological agency.
The Limits and Risks of the Strategy
The UAE’s AI ambitions face challenges, mainly due to reliance on foreign suppliers for advanced chips and infrastructure. Export controls from countries like the US can limit their strategic options.
Second, cybersecurity and data governance will grow in importance. A global AI hub must assure international partners that sensitive data and advanced tech are protected.
Third, geopolitical competition could restrict Abu Dhabi’s options. If Washington and Beijing demand technological alignment, the UAE may struggle to keep ties with both ecosystems.
Finally, the massive financial investment in AI may set unrealistic expectations. Investment alone can’t ensure technological leadership; long-term success relies on education, research, skilled talent, and internal innovation.
These limitations show AI diplomacy is not the same as technological sovereignty. The UAE aims for managed technological dependence: staying connected globally while building domestic capacity and strategic assets to avoid vulnerability.
Conclusion
The UAE’s rise as an AI hub highlights a global shift, where AI is crucial for nations to build alliances, exert influence, and demonstrate their standing in a divided world. The UAE shows how a middle power uses technology to boost strategic agency. Its AI diplomacy merges investment, infrastructure, economic diversification, and foreign policy. Partnerships with American tech firms strengthen ties with Washington, while its broader economic strategy maintains relationships with Asian and global partners. The model isn’t traditional alliance politics nor fully strategic autonomy.
Strategic interdependence in technology indicates that the US-China rivalry would not divide the world into two blocs. Middle powers, though less powerful than Washington or Beijing, possess assets like capital, markets, infrastructure, energy, and connectivity that major powers need.
The UAE’s challenge isn’t achieving technological independence, which is unlikely. Instead, it’s becoming valuable enough to multiple ecosystems to retain strategic leverage. If successful, AI could be as geopolitically significant as oil once was.
The UAE’s AI strategy is about transforming financial, technological, and diplomatic capital into strategic autonomy. As competition over tech resources intensifies, the UAE exemplifies how a middle power can leverage technological interdependence in statecraft. AI diplomacy is just starting, and the UAE aims to be a key player.
Dr Tauseef Javed
Related posts
The Maritime Blockade and the Strategic Calculus of the U.S., Iran, and Israel Toward a Renewed Armed Confrontation
Understanding Asim Munir’s Doctrine: Regime Security in Place of a National Goal
The Data Dilemma: Navigating the AI Systems Matrix
The Anatomy of a Shortfall: Europe’s Nine Capability Areas and the Lessons for Pakistan
From Quiet Diplomacy to Attempted Maritime Security Governance: Oman’s Role and Limits in the 2026 Strait of Hormuz Crisis
Anatomy of Asymmetry: How a Weaker State Converts Vulnerability into Leverage
Integration for Stability: The SDF’s Dissolution and Syria’s Security Order
The Western Flank Unravelled: Cross-Border Militancy, TTP Resurgence, and Afghan Taliban Governance
The Time of Guards Tank Divisions is Gone, or Maybe It is Not?
Re-pricing Israel’s Corridor: The Mecca Alliance and IMEC
The SCO at 25: From Regional Security Mechanism to Platform for a Multipolar Eurasia
Imran Khan: The Last Hope of a Nation
